C-310/97

2. The appeal on which the Court of Justice must give judgment on this occasion appears deceptively simple. The issue is whether or not the Commission is under an obligation to cancel penalties whose sub­ stantive invalidity can easily be inferred The issue here goes far beyond interpreta­ from a judgment of the Court of Justice. As tion of the abovementioned provisions and soon as the question is looked at in any requires general principles of law to be detail, the difficult conflict between the two brought into account. Whilst, on the one values mentioned above — substantive jus­ hand, the principle of legality requires, tice and legal certainty — becomes appar­ among other things, that the legal order ent. purge itself of any measures which are tainted by nullity, on the other hand legal certainty, and, more specifically, the prin­ ciple that definitive administrative mea­ sures are unchallengeable, allows the recti­ fication — at least formally — of such According to the respondents' contention, defects, after certain time-limits for insti­ the Commission's obligation to comply tuting proceedings have expired. After briefly analysing the contested judgment and the grounds of appeal, I shall attempt * Original language: Spanish. to give a systematic outline of the proce­ 1 — In the biography of Goethe which introduces the Spanish version of the complete works of that author (Aguilar, dure which — in my opinion — every Madrid 1963), Rafael Cansinos Assens says that 'Order is Community institution should follow in sacred for Goethe. Anything is preferable to anarchy' (p. 268). Goethe also rejects even limited popular suffrage, circumstances comparable to those of this freedom of the press and free expression of thought (p. 269). He is not therefore a good example for a modern democratic case and, finally, I shall apply those criteria society. to the present case.

4. During the 1970s, it was the custom of A. The Wood pulp decision of 19 Decem­ the producers of bleached sulphate wood ber 1984 pulp intended for the manufacture of high- quality paper to conclude long-term supply contracts, for periods of up to five years. Under such contracts, the producer guar­ anteed his customers the possibility of 7. As early as 1977, the Commission stated buying a minimum quantity of pulp each that it had discovered in the wood pulp quarter at a price not exceeding the price industry certain practices and agreements announced at the beginning of that period. which might be restrictive of competition. The customer, for his part, was free to buy Following the administrative procedure, more or less than the quantity reserved for commenced in relation to 57 producers him and could negotiate discounts on the and associations of producers of wood price announced. pulp, the Commission sent each of them a statement of objections. On 19 December 1984, the Commission adopted Decision 85/202/EEC 2 relating to a proceeding under Article 85 of the Treaty.

5. The quarterly announcing of prices con­ stituted a settled commercial practice in the European wood pulp market. The system In the decision, the Commission stated that was so organised that the producers noti­ 40 wood pulp producers, together with fied to their customers and agents weeks, or in some cases days, before the start of each quarter the prices, generally fixed in United 2 — Decision relating to a proceeding under Article 85 of the EEC Treatv (IV/29.725 — Wood pulp) (OJ 1985 L 85, States dollars, which they wished to apply p. 1 — authentic in the English version).

3 — Those who did not bring proceedings, in addition to the Swedish undertakings, included ITT Rayonier Inc. and the 10. In Article 1(5), certain producers, Norwegian, Portuguese and Spanish addressees. None of the including all the respondents in these latter four had been penalised. Also, the order of 20 March 1990 recorded the fact that the United States applicant, proceedings, were criticised for having Mead Corporation, had withdrawn its action. applied to their Community customers, in 4—Joined Cases 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85 Ahlström Osakeyhtiö and Others v contracts for the sale of wood pulp, clauses Commission [1988] ECR 5193.

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to the Fifth Chamber for consideration of D. The judgment of the Court of Justice of the substance. 31 March 1993

16. After the comprehensive Opinion deliv­ ered by Advocate General Darmon on C. The experts' report 7 July 1992, the judgment on the substance was delivered on 31 March 1993. 5The following points merit particular attention.

13. In the course of the subsequent proce­ dure the Court of Justice, by order of 25 November 1988, decided to have the question of parallelism of prices investi­ gated by experts. Whilst preparing their 17. As regards the infringement involving report, the experts were asked to say general concertation on announced prices, whether the documents relied on by the mentioned in Article 1(1) of the decision Commission justified its reaching the con­ (see point 8 above), which the Commission clusion as to parallelism between the inferred from the system of quarterly announced prices and the transaction announcements, the Court of Justice stated prices. The experts' report was submitted that: on 10 April 1990.

20. Having annulled the provisions con- cerning some of the infringements men- The Court concluded that, in the absence of tioned in the decision, the Court then firm, precise and consistent evidence, it was annulled or reduced the fines imposed by appropriate to annul Article 1(1) of the the Commission. decision.

21. As regards the fines for the only 18. As regards the infringement found in infringement upheld by the Court which is Article 1(2) of the decision, consisting in relevant here, namely the inclusion by general concertation on transaction prices certain undertakings of a clause prohibiting (see point 9 above), the Court considered resales or exports (Article 1(5) of the that the statement of objections had not decision), the Court took account of the made that allegation clear, for which reason following factors: the addressees had not had an opportunity effectively to defend themselves in the administrative procedure. Article 1(2) was therefore annulled.

— that the fines imposed on those under- takings penalised the infringements of participation in general concertation on announced prices and on transac- tion prices, for which the findings have 19. As regards the inclusion of clauses been annulled in both cases; prohibiting exports or resales, for which the Commission criticised certain under- takings — including the parties to these proceedings — in Article 1(5) of the deci- sion (see point 10 above), the Court dis- missed the action, considering that that

— that although the inclusion of the 6 — Paragraph 126, at [1993] I-1613. abovementioned clauses constituted a

E. The request for re-examination of the Having regard to those considerations, the Wood pulp decision Court reduced the initial amounts of the fines from between ECU 125 000 and ECU 200 000 to ECU 20 000 for each under­ taking. 23. After delivery of the judgment of 31 March 1993, the Swedish undertakings, by letter of 24 November 1993, asked the Commission to re-examine their legal situa­ tion in the light of the judgment and to refund to them the fines paid, to the extent 22. The Court of Justice also annulled the to which they had been imposed for provisions of the undertaking annexed to infringements found in Article 1(1) and the decision (see point 11 above), 7 in so far (2) of the decision, which had been as they imposed obligations other than annulled by the Court of Justice. those resulting from the findings of infrin­ gements made by the Commission which had not been declared void. In other words, it annulled the provisions by which the signatories undertook to allow and invoice most of their sales in the buyer's currency, not to announce their prices quarterly and 24. On 4 February 1994 the Director-Gen­ eral for Competition informed the Swedish undertakings that Commission officials had 7 — Although the Commission alleged that the undertaking was reached the provisional conclusion that a unilateral measure of the signatories and that, as such, it their request was to be denied and granted could not be the subject of an action for annulment, the Court considered that the obligations imposed by it were to be regarded in the same way as orders requiring an infringement brought to an end. By means of the under­ taking, the signatories assented to a decision which the 8 — The latter, nevertheless, had an interest in its annulment Commission was empowered to adopt unilaterally (see since, not having agreed to sign the undertaking, those paragraphs 180 and 181, at I-1625). undertakings had received considerably higher fines.

27. By application lodged at the Registry of 'I do not see any possibility to accept youi the Court of First Instance on 15 December request. Article 3 of the decision imposed a 1995 the Swedish undertakings brought the fine on each of the producers on an action which ultimately led to this one. individual basis. Consequently, in point 7 They claimed that the Court should: of the operative part of its judgment, the Court annulled or reduced the fines imposed on each of the undertakings who were applicants before it. In the absence ol an application of annulment on behalf ol your clients, the Court did not and indeed — annul the Commission decision of could not annul the parts of Article 3 4 October 1995 refusing partial reim- imposing a fine on them. It follows that bursement of the fines; the obligation of the Commission to com- ply with the judgment of the Court has been fulfilled in its entirety by the Commis- sion reimbursing the fines paid by the

— order the Commission to take all 9 — Footnote not relevant to English translation. necessary steps to comply with the

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judgment of the Court of Justice of G. The judgment of the Court of First 31 March 1993 and, in particular, to Instance of 10 July 1997 repay to the applicants the fines paid by each of them; 29. In its judgment of 10 July 1997, 10 the Second Chamber, Extended Composition, of the Court of First Instance upheld the applicants' claim for annulment of the decision of 4 October 1995 and at the — order the Commission to pay interest same time declared the application inad­ on the sums paid from the date on missible to the extent to which it sought the which the fines were paid to the date of issue of directions to the Commission. It reimbursement; also ordered the Commission to pay the costs.

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infringed, according to which 'the institu- ish undertakings were accused was based tion or institutions whose act has been on the same findings of fact and the same declared void... shall be required to take the economic and legal analyses as those taken necessary measures to comply with the into account in the judgment of annulment judgment of the Court of Justice'. favourable to those undertakings which brought an action. In those circumstances, it would be contrary to the principle of legality for the Commission not to have to review its initial decision. 32. According to the Court of First Instance, the possibility cannot be excluded a priori that the measures which an institu- tion must adopt under Article 176 in order to comply with a judgment of annulment 35. As regards the scope of the review delivered by the Court of Justice may, in which the Commission should carry out, exceptional cases, extend beyond the pre- the Court of First Instance reached the cise framework of the dispute which gave initial conclusion that there was nothing in rise to the annulment, the objective being to Community law to prevent the Commis- eradicate the effects of the illegalities found sion from repaying the fines and added in the judgment. In that connection, the that, 'if Article 176 were not to be deprived Court of First Instance referred to the of all its practical effect', the Commission judgment of 26 April 1988 in Asteris and would also be required 'in accordance with Others v Commission, 1 1and, more parti- the principles of legality and of good cularly, to that of 22 March 1961 in administration' to repay those fines, 'as SNUPAT v High Authority.12 they would have no legal basis'. 13

— contradictory reasoning. The respondents contend that, under Arti­ cle 155 of the Treaty, the Commission's first obligation is to see that the Commu­ nity legal order is respected, which neces­ sarily implies eliminating from it any 37. In its first submission, the Commission measures which have been declared sub­ contends that its only obligation in relation stantively void by the Court of Justice. In to the judgment of 31 March 1993 was to addition, the position advocated by the refund, in the manner described in that Commission would be conducive to legal judgment, the amounts of the fines paid by uncertainty and inconsistent application of the undertakings named in the judgment of Community law. If that approach were the Court of Justice, which can be no other followed, only the Swedish respondents, than those which were parties to the and not those who brought proceedings for proceedings. The Commission distinguishes annulment in due time, would continue — the cases cited by the Court of First for example — to be bound by the under­ Instance and concludes that they are not taking given to the Commission (see relevant. point 11 above), which was annulled by the March 1993 judgment (see point 22 above). Furthermore, in the course of any national proceedings based on Article 85 only the latter could invoke in their defence the partial nullity of the Wood pulp deci­ The respondents insist that the rules laid sion. down in Asteris and SNUPAT are properly applicable, in particular the statements of principle which they contain. From those statements the respondents infer that it is possible, once a measure has been declared void by the Court of Justice, for a Com­ 39. In its third submission, the Commission munity institution to be required, in the considers that the reasoning followed by context of Article 176, to revoke other the Court of First Instance in its judgment measures which were not contested but is contradictory. It observes that the Court were vitiated by the same defect. of First Instance first states that, in so far as an addressee has not brought an action against the aspects of a decision which affect it, that decision continues to be valid 14 and binding on it, and then goes on to say that, as a result of the March 1993 38. As regards the alleged infringement of Articles 173 and 189 of the Treaty, the Commission states that decisions not con­ 14 — Paragraph 58, at II-1209.

40. As I stated in the introduction, this case clearly reflects the dialectical tension 43. In so far as any attempt to define in a between two ideals central to every system precise context the scope of the require- of laws: justice and legal certainty. 16 Let ment of legality (the first ground of appeal) me say that, as a matter of principle and so in relation to that of legal certainty (second far as is relevant here, Community law, ground) will necessarily affect the relative with its inherently fragmentary approach, scope of the other, it is appropriate to analyse the first two grounds as one. Moreover, in order to determine whether 15 — Paragraph 92, at II-1218. or not there is any contradiction between 16 — In the sphere of political sociology, Machiavelli, in Il Principe, wonders whether, for a person exercising power, the two principles in the reasoning of the it is better to be feared than loved, a dilemma which contested judgment (subject-matter of the corresponds to what in the legal field may represent the tension between the values of justice and certainty. His third ground of appeal) it is necessary to conclusion is well known: 'as it is difficult to be both at the abide strictly by the terms in which they are same time, the safest course is to be feared rather than loved'. expressed. I consider therefore that it is

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cerning the revocation of measures creating measure, appraised in the light of an individual rights and then — absolutely annulling judgment, for example, and its correctly, in my opinion — applying it a withdrawal, there must be a balancing fortiori to measures imposing burdens exercise : the interests and conduct involved (paragraphs 88 to 91). Having established must be weighed up in the light of equitable the irregularity affecting the infringements considerations. Those considerations will attributed to the Swedish addressees and determine the degree of latitude available declared that a Community institution is to the institution in each case. If those authorised to revoke measures imposing interests are not weighed, what would burdens, the Court of First Instance goes on probably be deprived of all its practical to say: effect would be the mandatory time-limit of two months laid down in Article 173.

'In that case, if Article 176 were not to be deprived of all its practical effect, the 47. In the third part of the Court of First Commission would also be required, in Instance's appraisal (paragraphs 96 to 100) accordance with the principles of legality the Court declared inadmissible the under- and good administration, to repay [the] takings' claim that part of the fines paid by fines, as they would have no legal basis.' 18 them should be refunded. The reason given is that 'the Community judicature... is not entitled to issue directions to the Commu- nity institutions'. 19

strative authorities, it is no less true that the right of the Administration (in this case that division will be meaningful only if the the Community institutions) to undertake administrative authority enjoys a degree of at any time a fresh examination of those latitude — however small — in carrying measures which impose a burden or charge. out its assessment. However, the inference That right becomes an obligation when to be drawn from paragraph 92 of the factors emerge which prompt reasonable contested judgment seems to be that no doubts as to the legality of the measure. such latitude is available in the present Different from that obligation of review 20 case. is the power to withdraw such measures which is vested in the Community institu­ tions. In the exercise of that right the institution in question enjoys a discretion to appraise, as a matter of equity, the various circumstances present in each case, although it is true that, in certain cases, that discretion may become so insignificant that an obligation to withdraw the measure must be envisaged. In any event, those rights are subject to review by the court.

V — The solution which I propose

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essential link between the Administration regard the clauses of the annulled under- and the public interest and legality. taking as valid. It is of only academic importance to verify whether those clauses are no longer binding on the Swedish undertakings as a result of the particular wording of point 6 of the operative part of that judgment 21 or because they no longer have any economic rationale, 22 as the Commission contends, or else as a conse- quence of the obligation which Article 176 50. It is also appropriate to recognise only imposes on the institution from which the the discretion of the Administration to annulled measure emanates, as contended withdraw final measures vitiated by a by the respondents. In any event, that defect, but not a corresponding right to question falls outside the scope of these demand such withdrawal. To my mind, the proceedings. latter approach would leave the way open to the amendment of final measures for reasons of expediency but it is not appro- priate to situations marked by a serious or obvious irregularity in which complete legal protection is required - protection which involves conferring on the person concerned, in particular circumstances, a real subjective right to have the basis of a A. Preliminary issues vitiated measure re-examined when it is not open to challenge by ordinary means.

from certain action and pecuniary penal­ to be valid and binding on it. In other ties. words, it is not that the declaration that a decision is void has no effect erga omnes but rather that, since the decision is a divisible collective measure, that effect is limited in each case to the subject-matter of 53. Before the Court of First Instance, the the dispute brought before the Community Swedish undertakings argued — in support Court, which can be nothing other than the of their challenge — that the Wood pulp parts of the collective decision which relate decision constituted a single act of which to the addressee concerned. the annulment by the Court of Justice accrued to the benefit of all its addressees, not just those who took part in the proceedings for annulment. I shall now examine in detail each of the elements of my proposal, referring, where appropriate, to precedents in the case-law of the Court of Justice and to the solutions That claim was rejected by the Court of adopted in the laws of the various Member First Instance, which considered that the States. Wood Pulp decision, although drafted and published in the form of a single decision, was to be seen as a bundle of individual decisions making a finding or findings of infringement against each of the undertak­ ings to which it was addressed and, where appropriate, imposing a fine. 2 3 I fully support that interpretation: the Wood Pulp B. The general rule: final acts are not open decision is a divisible collective measure. to challenge

become final, also known as the principle legal relations, contribute, to the same of res judicata. 25 On expiry of the period extent as actions for recovery, the system laid down by the legislature for actions to of remedies or the principle of res judicata, be commenced, a vitiated measure can no to attainment of the objectives of legality longer be challenged and any defect to which are inherent in every legal order. No which it may be subject becomes a part of system of law can allow the validity of the the established order. This principle is so legal situations which arise within it to be important that I feel I can say in general questioned indefinitely. 27 That basic state- terms that it must mark the starting point ment is reflected, as far as the present case of this analysis. The general rule must is concerned, in the existence of peremp- therefore be that final measures are not tory time-limits for legal proceedings to be open to challenge. brought against certain acts of the institu- tions. Article 173 of the Treaty provides, inter alia, that any natural or legal person may institute proceedings against a decision addressed to him within a period of two months of its notification. The extreme 56. Nevertheless, however necessary cer- brevity of this period may be open to tainty as to the temporal effectiveness of criticism, particularly where the acts which measures may be, there are occasions when it is wished to attack involve facts or it must give way to considerations which appraisals of great complexity or where the legal order itself treats as deserving of they have an essential impact on the greater protection. The Court of First subjective rights of the addressee. 28 How- Instance gave the impression in its judg- ever, as this question falls outside the scope ment that, by virtue of Article 176, such of this dispute I shall not go into it. considerations may include requirements of legality. 26

procedure; it reflects the legitimate concern ν Court of Justice,30 until the most recent of the legal order to apply certain time- one, of 30 January 1997 in Wiljo,31 the limits to the bringing of actions against Court of Justice has held that 'a decision measures of the Administration. Not a adopted by a Community institution which trivial concern, since, apart from the has not been challenged by its addressee important objectives of legal certainty within the time-limit laid down by Arti­ already referred to, it serves no less impor­ cle 173 of the Treaty becomes definitive as tant aspects of administrative efficiency.29 against h i m ' . 3 2 That dictum — in the words of the Court of Justice itself — 'is based in particular on the consideration that the periods within which legal pro­ ceedings must be brought are intended to ensure legal certainty by preventing Com­ 59. As compared with the clarity of the munity measures which produce legal fifth paragraph of Article 173, Article 176 effects from being called in question indefi­ merely obliges the institution from which nitely'. 3 3 the measure annulled by the Court of Justice emanated to 'take the necessary measures to comply' with its judgment.

62. As far as the laws of the Member States are concerned, it must be observed that nowhere — with the possible exception of 60. Since it is a general rule and is Denmark — are effects ultra partes of the expressed in dazzlingly clear terms, the scope of those recognised by the Court of two-month time-limit laid down by Arti­ First Instance attributed to a judgment of cle 173 must be observed in any action annulment. Quite the contrary: a clear against measures of the institutions based majority 34 of European systems uphold on grounds of lack of competence, infrin­ the principle of the unassailability of gement of essential procedural require­ administrative measures once the relevant ments, breach of the Treaty or of any legal (and relatively short) periods have provision for the implementation thereof, elapsed. 3 5 or misuse of powers.

general rule that final measures are unchal- process of European integration 39 has been lengeable when it declares that the Wood based, the Community institutions may be pulp decision is binding on the addressees called on to review measures adopted by who did not bring proceedings, referring in them which have become final. I repeat that paragraph 58 36 to the settled case-law of that obligation cannot have as its legal the Court of Justice on the subject (TWD basis — at least not exclusively — the claim Textilwerke Deggendorf). 37 However, that that, by implication, a judgment of the important rule is eclipsed in the Court's Court of Justice annulling a measure takes further reasoning, where it only recognises effect ultra partes. That option not only that, to ensure legality, there may be an displays significant shortcomings from the obligation — which it infers from Arti- point of view of the way in which the law is cle 176 — to examine the effect ultra applied (why should a fresh examination partes of an annulling judgment, pursuant not be undertaken where the irregularity to a request made within a reasonable becomes apparent in a context other than period. 38 that of legal proceedings?) — also, above all, it does not allow the interpretation contra tabulas of Article 173 which implies permitting the (limited and indirect) chal- lengeability of acts of institutions which have become final. Only by recourse to superior considerations of equity, based on the requirements of the legality of admin- istrative action, can this exception to the general rule be justified. C. The entitlement and the obligation to re- examine measures imposing burdens. Indi- cations of irregularity

66. The possibility of re-examining and if need be withdrawing — ex proprio motu 68. In certain circumstances, the mere or at the request of a party — an admin­ entitlement of a Community institution to istrative measure of an individual nature, re-examine an unchallengeable individual such as a decision, has been gradually measure becomes an obligation and, as establishing itself in Community law from such, can be the subject of legal proceed- the outset. If such measures confer subjec­ ings. That obligation will be imposed by tive rights on their addressees, they can the requirement of legality where there is only be withdrawn when they are contrary any serious indication of irregularity, exist- to law and only if the withdrawal occurs ing from the outset or becoming apparent within a reasonable period. 4 1 It is obvious subsequently, which may affect the measure that the latter requirement, intended to in question. safeguard legitimate expectations as to the legality and stability of the tainted measure, has no raison d'être in relation to measures which impose a burden. 42

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withdrawal of that act but to a review — in the only plausible explanation for the the sense of re-examination — by the indications of parallel conduct in the mar­ institution concerned of the justification ket. for it, in accordance with the procedures with which I will deal below. 4 7

72. Paraphrasing paragraph 82 of the con­ tested judgment, I consider that those findings — relating generally to the validity of the Commission's economic and legal assessment of the parallel conduct observed 71. There is no doubt that — as correctly on the market — may give rise to serious observed by the Court of First Instance — doubts as to the legality of the wood pulp the judgment of 11 March 1993 annulled decision in so far as it states that the the first paragraph of Article 1 of the Wood Swedish addressees — the respondents in pulp decision, on the basis of considera­ this case — also infringed Article 85(1) of tions which are generally applicable to the Treaty by concerting on prices for analysis of the wood pulp market carried bleached sulphate wood pulp for deliveries out by the Commission at an earlier stage, which are not based on an examination of to the Community during the periods individual conduct or practices engaged in specified. by each of the addressees.

73. It can therefore be seen from the judgment of 11 March 1993 that there were serious indications of substantive irregularity regarding the infringements In fact, the Commission inferred that there attributed to the Swedish addressees in was an infringement involving general Article 1(1) of the Wood pulp decision. 48 concertation on announced prices mainly In those circumstances, the Commission from the system of quarterly announce­ not only was entitled generally to re­ ments (see points 5 and 8 above). However, examine at any time a measure imposing the Court of Justice considered that the a burden but, having regard to superior available evidence did not prove that the requirements of equity, was obliged to existence of concertation and prices was undertake, at least, a fresh appraisal of

It would therefore be appropriate, in line with the provisions of Article 173 concern- ing proceedings for annulment, to require an application for review to be made within a period of two months after the person F. The time-limit for requesting review concerned became aware, or could have become aware, of the indication of irregu- larity relied upon. Another possibility would be to follow the prudent approach of the Court of First Instance and decide 75. The Court of First Instance considered case by case in accordance with the criter- that any application for review should be ion of reasonableness. submitted within a reasonable period. 50

If the first of the above options were 76. Pending the adoption in the Commu- followed, it would be legitimate to ask nity context of complete rules governing whether the application made by the Swed- administrative procedure — the basic ish undertakings on 24 November 1993 requirement of legal certainty — any deter- was lodged beyond the time-limit reckoned mination of a time-limit for seeking review from the date of the judgment of 31 March of a measure which is in itself not open to of the same year. challenge is, in practice, hazardous.

49 — This is generally the case in Italian law (see, among others, the decisions of the Consiglio di Stato of 16 February 1979, Sixth Chamber, No 81, and of 20 April 1994, Fifth Chamber, No 345) and in Netherlands law (see H. Hen- neken, 'Commentary on the judgment of the Centrale In any event, I do not think that the Court Raad van Beroep of 3 July 1997', Administratiefrechtelijke Beslissingen 1997, p. 419). of Justice will have to resolve this question 50 — Paragraph 72, at II-1213. in relation to the present proceedings.

G. The possibility of withdrawing a final mind in which, quite rightly, it was stated measure imposing a burden that 'the requirements of good administra- tion also apply to citizens'. 52 A person who has not availed himself of the ordinary remedies open to him cannot require the 77. As I stated above (see point 46), my Administration to display more than ordin- main difficulty with the contested judgment ary zeal in the defence of his rights. More- lies in the unmitigated automatism with over, the unchallengeability of final admin- which it appears to deduce from the istrative measures is often justified by ascertainment of the substantive irregular­ reference to, inter alia, the efficacy of ity of the penalties contained in an admin­ administrative action. 53 And, indeed, good istrative measure, which in principle has administration is also efficient administra- become final, that they must be withdrawn tion. since they 'would have no legal basis'. That interpretation, which purports to have been carried out 'in accordance with the princi­ ples of legality and of good administration' in order to ensure that Article 176 is not 'deprived of all its practical effect', 51 is Finally, as far as Article 176 is concerned, it open to criticism from various points of must be acknowledged that its own effec- view, beginning with the very principles tiveness is exhausted when the institution in which are invoked in its favour. question adopts the measures required by the precise context of the dispute which gave rise to the judgment of annulment. 54 If the Court of First Instance's interpreta- tion were accepted, every institution would be under an obligation to review any of its In the first place, the principle of legality measures in the light of a judgment of also requires observance of the time-limits annulment subject to the sole and unusual laid down for bringing proceedings, requirement that a request had been sub- because legality applies both to substance mitted 'within a reasonable period' — and and to formal or procedural aspects. More­ why not on its own initiative? — and over — as I have explained — in the event would have to amend those measures if of a conflict between these two levels of any of them were found to contain the legality, the general rule is rather that legal defects giving rise to illegality noted in the situations which have been consolidated by judgment. Thus, Article 173 of the Treaty the expiry of time-limits for pursuing a and the time-limit of two months for remedy are not open to challenge. bringing proceedings against Community measures would be deprived not only of their effectiveness but also of any potenti- ality.

The central point of Asteris is the question of the temporal effect of the declaration that a legislative provision of a general 80. Among the laws of the Member States, nature is void. It deals, ultimately, with a only the Danish system would allow a specific manifestation of the classic pro- solution like that advocated by the Court of blem of the prospective effect of declara- First Instance, and that would, essentially, tions of nullity of legislative measures, result from the relaxed approach to or, accepted by the Court of Justice since its even, non-existence of mandatory time- famous judgment in Defrenne II 5 7 When limits for bringing court proceedings provisions of a general nature are involved, against administrative measures. Almost the interests at stake are not comparable all the other systems, with differences of with those which arise in relation to detail, incorporate the concept of unchal- decisions of an individual nature. The logic lengeability of final administrative mea- of the Asteris judgment — which, in any event, includes no reasoning whatsoever 58 — And if it were, it would necessarily lead to a result contrary to that in the contested judgment, since the benefit of the nullity of a general provision is available only in cases 55 — Cited in point 32 above. which were already pending when the nullity was declared 56 — Cited ibid. (see paragraphs 74 and 75 of Defrenne II, at p. 482). 57 — Case 43/75 [1976] ECR 455. 59 — Pages 86 to 88.

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The logical consequence is that if, because the legal situation created by it is considered intolerable, a measure is with drawn as regards certain applicants, it will be necessary also to withdraw it as regards any other addressee of the same or an identical measure, since the intolerability of 81. The same solution must be adopted in the measure cannot be dependent upon the this case. Thus, in the case of a pecuniary addressee's action regarding proceedings. 62 penalty like the one at issue here, the institution will have to weigh both the nature and seriousness of the defect, its effects and the possibility of remedying it, and also the severity of the penalty and its impact on the assets of the individual or the viability of the undertaking. In addition,

Neverthe less, there are several cases in which that latitude is more restricted or where, no 60 — Virtually all the Member States recognise, under different latitude whatsoever being available, the names and with different characteristics, the concept of discretional review by the administration of final measures conduct of the institution may be regarded which are subject to a defect. As I pointed out earlier, that as being subject to specific rules. I shall power confers on individuals the right to be heard, to have the administration use its discretion rationally and objec now enumerate the most frequent cases, tively, and to be given a reasoned decision.

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— Measures which are ipso jure void for it, to measures which exhibit particu- larly serious and manifest defects', 64 being limited to 'quite extreme situations'. 65

The case-law of the Court of Justice has 82. The general rule that final measures are been very restrictive in declaring Commu- unchallengeable cannot be relied upon as nity measures non-existent,66 taking into against measures which are ipso jure void. consideration, when doing so, not only the Some writers consider that nullity ipso jure, seriousness of the illegality, but also the or absolute nullity, constitutes the most appearance or obviousness of the irregular- extreme category of invalidity, character- ity. 6 7 ised by the fact that it cannot be rectified, is not subject to a time-bar and may be relied on erga omnes. Classic examples of this particular kind of nullity are total and absolute failure to follow the prescribed 84. A Community institution, on reaching legal procedure or the adoption of a the conclusion that one of its measures is measure by a body which is manifestly ipso jure void or when it has been declared not empowered to do so. void by the Court, must withdraw it on its own initiative or at the request of a party, even though it has become final, without prejudice to any liability which it may have incurred.

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having regard to the specific circumstances existing between the annulled measure and of each case, particular defects may be any other measure, of identical content, classified as nothing more than essential which has become final through not being procedural requirements or may lead to the attacked. In such circumstances there is no absolute nullity of the measure. 68 discrimination, since different situations are given different treatment: in the first, the measure is annulled because the avail­ able remedies have been used; in the other, there is no annulment because those reme­ dies were not invoked. The discrimination 85. A separate category, but one that which is relevant here must, to constitute attracts similar penalties, deserves mention such, have some origin outside the control here: measures adopted in breach of new of the party invoking it. legislation concerning penalties.

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Authority of the ECSC, which had laid with a further refusal by the High Autho- down a subsidy regime for the importation rity, SNUPAT brought further proceedings of ferrous scrap. That regime was financed before the Court of Justice, leading to the out of contributions which Community judgment of 22 March 1961, in which steel undertakings were obliged to make SNUPAT's claim was upheld. In its reason- into a common fund of amounts deter- ing, the Court of Justice paid particular mined by reference to their consumption of attention to the special characteristics of scrap. To calculate such consumption — the equalisation machinery to which the and, therefore, the respective contribu- proceedings related, which created a situa- tions — scrap from their own resources tion of solidarity between all the under- could be excluded. takings using ferrous scrap.

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OPINION OF M R RUIZ-JARABO — CASE C-310/97 Ρ

in view of the principles established by the VI — Application of the proposed solution abovementioned judgment, since it was to the present case required as from that time to conform to those principles at the risk of tolerating discrimination interfering with normal competition as provided for by the funda­ 92. I can at this stage apply all the fore­ mental rules of the Treaty.' 69 going considerations to the present case. Although it might be concluded here — a conclusion which coincides with the con­ tested judgment — that the decision on the re-examination and possible withdrawal of the final measure is, primarily, a matter for the institution which adopted it, I believe that the Court of Justice, having all the information before it, must give final judgment on the claims of the parties, 70 even if only for the basic reason of keeping proceedings to a minimum. 7 1 — Particularly severe penalties

93. It is thus clear that, by virtue of the judgment of 11 March 1993 and the pro-

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cess of extrapolation described earlier, There was, rather, a defect in the appraisal important indications of substantive irre- of the evidence on which the Commission gularity have been disclosed in relation to relied in adopting the contested decisions the infringements attributed to the Swedish which, not being classifiable as a gross addressees in the Wood pulp decision. For error, should not entail nullity ipso jure of that reason, the Commission is obliged, at the tainted measure. least, to re-examine the legal foundation of the findings relating to those infringements.

Nor does it appear that the penalties at 94. Therefore, the Commission errs in law issue in these proceedings are particularly where, in a letter signed by its member severe as far as the viability of the addres- responsible for competition, dated 4 Octo- sees is concerned, nor, finally, does it ber 1995 (see point 26 above), it replied to appear that maintenance of the measure the Swedish addressees to the effect that the might produce intolerable discriminatory Commission was not even entitled to effects of the kind described above. refund the fines claimed.

95. The result of such an examination should have been either partial withdrawal 96. The absence of those particular circum- or maintenance of the contested decision in stances does not relieve the institution from so far as it was addressed to the Swedish which the measure emanated of the duty to undertakings. In my view, none of the reappraise the justification for it. To that circumstances making it advisable to end, the interests at stake must be taken restrict the degree of latitude ordinarily into account, the various factors being enjoyed by Community institutions, as weighed against each other. If on balance described above, is present. I would point it seems that it would be intolerable to out that those circumstances, having to be maintain the measure, it must be with- strictly interpreted, are never presumed. drawn.

reimbursement of the fines. They refer only Article 176 or the requirements of legality, to the legal foundations on which the were to consider that threshold sufficient to contested judgment purported to be based. justify withdrawal of a measure which had The Commission, for its part, resisting been final for 14 years, it would be dealing withdrawal, refers to the considerations of a mortal blow to Article 173 and the legal certainty embodied in Article 173 and procedural order stemming from it. For to the general prohibition of discrimina­ my part, I consider that since there is no tion — discrimination which would arise if superior consideration of equity whatso­ the penalty were withdrawn and the fines ever, nor has there been claimed to be, the were refunded, primarily between the balancing of the various interests which I Swedish undertakings, which did not bring propose can produce no result other than proceedings at an earlier stage, and the that pursued by the general rule, which is to undertakings which did do so, thereby preserve the finality of the contested pen­ accepting the risk inherent in bringing alty. Accordingly, it is proper — in my proceedings; but also between the Swedish view — for the Court of Justice to uphold undertakings and all those persons pena­ the Commission's application and, giving lised who did not bring proceedings in time judgment on the substance, since the state and did not enjoy the advantage, as in this of the proceedings so permits, to dismiss instance, of a judgment of annulment being the respondents' contention that the Wood given in relation to their case. pulp decision of 19 December 1984 should be withdrawn.

(2) give judgment on the substance and dismiss the appeal by AssiDomän and Others against the Commission decision of 31 March 1993;

(3) order the respondents to pay the costs.

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